SAN SALVADOR, June 9 (Reuters) - El Salvador became the first country in the world to adopt bitcoin as legal tender after Congress on Wednesday approved President Nayib Bukeles proposal to embrace the cryptocurrency, a move that delighted the currencys supporters.

With 62 out of 84 possible votes, lawmakers voted in favor of the move to create a law to adopt bitcoin, despite concern about the potential impact on El Salvador's program with the International Monetary Fund.

Bukele has touted the use of bitcoin for its potential to help Salvadorans living abroad to send remittances back home, while saying the U.S. dollar will also continue as legal tender. In practice, El Salvador does not have its own currency.

"It will bring financial inclusion, investment, tourism, innovation and economic development for our country," Bukele said in a tweet shortly before the vote in Congress, which is controlled by his party and allies.

In an idea he appeared to have developed overnight, Bukele later said he had instructed state-owned geothermal electric firm LaGeo to develop a plan to offer bitcoin mining facilities using renewable energy from the country's volcanoes. read more

He said the idea was to build a bitcoin mining hub around the country's geothermal potential. He also said that El Salvador would offer citizenship to people who showed evidence they had invested in at least three bitcoins.

The use of bitcoin will be optional for individuals and would not bring risks to users, Bukele said, with the government guaranteeing convertibility to dollars at the time of transaction through a $150 million trust created at the country's development bank BANDESAL.

Under the law, bitcoin must be accepted by firms when offered as payment for goods and services. Tax contributions can also be paid in the cryptocurrency.

"If you go to a McDonald's or whatever, they cannot say we're not going to take your bitcoin, they have to take it by law because it's a legal tender," Bukele said in an online conversation he held with crypto-currency industry figures in parallel to the debate in Congress.

Its use as legal tender will begin in 90 days, with the bitcoin-dollar exchange rate set by the market. Bukele said the government and Central Bank did not currently hold any bitcoin.

In the capital, San Salvador, reactions were mixed, with some excited that the new currency could increase prosperity and financial options. Others were skeptical.

"How am I going to agree with this? I haven't seen it even in photos. I know nothing about it, you need to understand your currency," said Estela Gavidia, clutching shopping bags and recalling the loss of purchasing power many poor people suffered when the dollar was adopted in 2001.

Cryptocurrency supporters hailed the move as legitimising the emerging asset, but its impact on bitcoin regulation, taxation or adoption in other countries remains to be seen.

There were no immediate signs that other countries would follow El Salvador's embrace of bitcoin.

"Whether this becomes the first in what becomes a trend and then snowballs, or whether this will be a blip, we will only know through history," said Brandon Thomas, partner at advisory firm Grayline Group.

Analysts have also said the move could complicate talks with the IMF, where El Salvador seeks a more than $1 billion program. read more

Bukele said he will meet with the IMF on Thursday to discuss the bitcoin law, among other issues. He said in setting up the meeting he had tried to explain to them that the shift was "not going to change our macroeconomics."

Bitcoin banners are seen outside of a small restaurant at El Zonte Beach in Chiltiupan, El Salvador June 8, 2021. REUTERS/Jose Cabezas/File Photo

Read More

Bitcoin enjoyed its best day in two weeks, rising as much as 6% to $35,200.

"The market will now be focused on adoption through El Salvador and whether other nations follow," said Richard Galvin of crypto fund Digital Asset Capital Management. "This could be a key catalyst for bitcoin over the next two to three years."

BEACH INSPIRATION

It was not immediately clear how long Bukele had been working on the bitcoin plan, but he said on Wednesday he was inspired by a project called Bitcoin Beach that introduced the cryptocurrency in an El Salvador beach town last year.

He worked on the idea with Jack Mallers, CEO of Strike, a digital wallet that uses the Lightning Network to enable small payments in Bitcoin.

Bukele has also pointed out a tweet of his from 2017, before he was a presidential candidate, in which he suggested using bitcoin.

Emerging economies - where bank penetration is much lower than in developed countries and reliance on money transfers from abroad much higher - have quickly warmed to cryptocurrencies.

Outside the United States, countries with the highest crypto production and trading volumes are all developing nations, according to BofA, including China, Colombia and India.

Bukele says some 70% of people in El Salvador lack access to traditional financial services.

But the use of digital currencies in general can also pose risks for dollarized economies, analysts say.

"The root cause of dollarization is high local inflation, which could worsen, too, if digital currencies prove inflationary," said David Hauner at BofA.

El Salvador relies heavily on money sent back from workers abroad. World Bank data showed remittances to the country made up nearly $6 billion or around a fifth of GDP in 2019, one of the highest ratios in the world.

The cryptocurrency offers, in theory, a quick and cheap way to send money across borders without relying on remittance firms typically used for such transactions. It is not clear what proportion of remittances sent to El Salvador are in bitcoin.

Converting local currencies to and from bitcoin often relies on informal brokers, while trading often demands technical knowledge.

El Salvador will promote training and mechanisms to allow access to bitcoin transactions, the law said.

Financial regulators and policymakers warn bitcoin facilitates money laundering and other illicit uses.

Bukele brushed off the fears, saying criminals already use U.S. dollars and other assets to launder money.

The problem is not the dollar, it is the criminals, he said.

Reporting by Nelson Renteria, Writing by Daina Beth Solomon, editing by Louise Heavens

Our Standards: The Thomson Reuters Trust Principles.

Link:
In a world first, El Salvador makes bitcoin legal tender ...

A visual representation of bitcoin.

STR | NurPhoto via Getty Images

Bitcoin rose back above the $50,000 mark on Tuesday after plunging in September from the same level on fears about regulation in the U.S. and China.

Bitcoin rose as high as about $50,400 on Tuesday, topping a key psychological resistance level for traders and reclaiming third-quarter losses. It last traded 3% higher at $50,680.82. It's currently up 14% so far for the month of October and has gained 72% on a year-to-date basis.

The last time bitcoin broke $50,000 was at the start of September, when the cryptocurrency became legal tender in El Salvador. Cryptocurrencies have been rallying since Friday as investors bet on a fourth-quarter run. Bitcoin spent much of the third quarter hovering in the low $30,000 range as investors worried about regulatory policies in China and the U.S., though it had a strong finish.

Teddy Vallee, chief investment officer at Pervalle Global Capital, said he expects momentum to continue through the quarter if a big equity correction doesn't get in the way of it.

"Long term holders now make up more than 80.5% of total supply, which has historically led to large rallies over the ensuing six months," he said. "Absent of a large equity correction, we see prices higher from here by year end. Incremental demand should remain strong, as institutional adoption continues to accelerate, which creates a favorable supply/demand dynamic."

The rally comes on the heels of comments made last week by Federal Reserve chairman Jerome Powell, who said in aHouse Committee on Financial Services hearing that he has "no intention to ban" cryptocurrencies in the U.S. the way China repeatedly has.

There's been bullish commentary from Wall Street supporting the comeback. Bank of America called the digital assets sector "too large to ignore."

"Bitcoin is up over 2x its 2017 high at ~$47,000, as adoption by individuals increased, corporate managements begin due diligence and regulators work to provide a framework that could bring digital assets into the mainstream," it said. "Bitcoin remains the most valuable digital asset at an aggregate value of $887 billion. Value drivers include supply/demand dynamics, scarcity (only 21 million coins total; ~19 million already mined) and potential ETF approval timing."

See the original post here:
Bitcoin climbs back above $50,000 as it starts October on a tear - CNBC

Bitcoin price today surged above the $50,000 mark for the first time in four weeks. The world's largest cryptocurrency by market capitalization rose more than 5% to to hit $50,312 on Tuesday.

The cryptocurrency fell below that level on September 7 amid a broader selloff in shares of cryptocurrency and blockchain related firms that day. It continued to fall in September, hitting a low of $40,596 on September 21.

Other cryptocurrency prices also gained with ether, the coin linked to ethereum blockchain and the second largest crypto trading at $3,466, up 3%. Cardano, dogecoin and other digital tokens including XRP, Litecoin, Uniswap also were higher.

Cryptocurrency investment products and funds recorded inflows for a seventh straight week, as institutional investors warmed to more supportive statements from regulators, data from digital asset manager CoinShares showed on Monday.

Bitcoin recorded its third straight week of inflows. Ethereum products and funds, meanwhile, posted another week of inflows totalling $20 million, despite conceding market share to bitcoin in recent weeks. Inflows to ether, the token for the Ethereum blockchain, so far this year amount to $1 billion.

Another report showed that India, Vietnam and Pakistan are helping to lead the expansion of cryptocurrency markets in central and southern Asia, according to Chainalysis. Indias market grew 641% over the past year and Pakistans 711%, a report from Chainalysis showed, using a metric that estimates the total cryptocurrency received by a country.

(With inputs from agencies)

Subscribe to Mint Newsletters

* Enter a valid email

* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

More here:
Bitcoin price hits $50,000 for first time in a month - Mint

Twelve years ago today, pseudonymous Bitcoin user NewLibertyStandard published what is likely the first pricing of Bitcoin in US Dollar terms.

On his website of the same name, NewLibertyStandard went on to describe how they formulated their 2009 exchange rate:

During 2009 my exchange rate was calculated by dividing $1.00 by the average amount of electricity required to run a computer with high CPU for a year, 1331.5 kWh, multiplied by the the average residential cost of electricity in the United States for the previous year, $0.1136, divided by 12 months divided by the number of bitcoins generated by my computer over the past 30 days.

The pricing of Bitcoin in dollar terms is remarkable because it signals the first mark of demand for the asset, or one methodology of how an exchange dynamic could arise. This theoretical price signals the following:

Someone in the market was willing to part with $1 dollar for 1,309.03 BTC, because they valued that amount of Bitcoin more than $1 dollar. Conversely, a counterparty at that time (in this case probably NewLibertyStandard as well) was willing to trade 1,309.03 BTC for $1 dollar, because they valued the Bitcoin less than one dollar. The price of 1 BTC was $0.00076392.

On 6 October 2009, the price in Bitcoin rose by NewLibertyStandards measure. For a moment that day, the price of 1 BTC was $0.00088454.

At the time of writing, 1 BTC costs about $49,880.00.

Lets compare:

5 October 2009: 1BTC = $0.00076392

5 October 2021: 1BTC = $49,880.00

49,880.00 - 0.00076392 = 49,879.9992

49,879.9992 / 0.00076392 = 65,294,794.3

65,294,794.3 * 100 = 6,529,479,430%

Bitcoin has risen 6,529,479,430% since it was first priced in US dollars. Bitcoin is the most appreciating asset in human history.

Read the original:
Bitcoin Is Up 6.5 Billion Percent Since It Was First Priced In USD - Bitcoin Magazine

'What Bitcoin Did' presenter Peter McCormack talks about his crypto investments

Peter McCormack, bitcoin bull and voice of the hugely popular 'What Bitcoin Did' podcast, joins Claer for a Money Clinic Investment Masterclass about cryptocurrencies. Recently back from a trip to El Salvador, the first country to make bitcoin legal tender, Peter tells Claer why he believes the cryptocurrency is the 'best form of money' and why regulatory crackdowns, volatile pricing swings and the divergent opinions of professional investors have failed to dampen his enthusiasm.An investor with a long-term view, Peter shares the highs and lows of his personal investment journey, and sets out the risks younger investors should know about before risking a single satoshi. With insight from Katie Martin, the FTs markets editor.

Further reading:

Check out Peters podcast 'What Bitcoin Did'

Have you heard this Money Clinic episode? Bitcoin: Ill either be rich, or wrong

Theres a free-to-read column from Claer: Why young investors bet the farm on cryptocurrencies

Heres Vijay Boyapatis The Bullish Case for Bitcoin

Presented by Claer Barrett. Produced by Clare Williamson. Edited by Persis Love. Sound design by Breen Turner.

See acast.com/privacy for privacy and opt-out information.

Transcripts are not currently available for all podcasts, view our accessibility guide.

Read the original here:
'Bitcoin is the best form of money': Investment notes from a crypto expert - Financial Times

With that, lets move to the Pandora Papers, which were just released over the weekend. These are a significantly larger leak than the Panama Papers, but they were coordinated by the same journalist organization, the International Consortium of Investigative Journalists, or ICIJ, who looked at the Paradise Papers. In total, there are 11.9 million files and 2.94 terabytes of data. The collaboration to go through this involved 600 journalists from 150 different media outlets, in 117 different countries. Unlike the Panama or the Paradise Papers, these came from 14 different firms or entities that offered services in 39 different jurisdictions. Remember, both Panama and Paradise were largely centered on one, or a small handful of these types of entities. The Pandora Papers have details of more than 27,000 companies and 29,000 beneficial owners of those entities, which is more than twice as many individuals as had been identified in the Panama Papers. The people named in the Pandora papers include more than 330 politicians from 90 different countries, and also include 130 Forbes billionaires. The bulk of these documents relate between 1996 and 2020, although some go back to the 70s, and it is estimated that it revealed $11.3 trillion in offshore wealth.

More here:
Bitcoin, Ethereum, Crypto News and Price Data - Coindesk

Watch This Episode On YouTube

Listen To This Episode:

When first explaining Bitcoin to people, it can be difficult to find a place to begin. After consuming endless amounts of content that discuss economics, philosophy and history, there is not a single clear place to start. Of course, it helps to tailor each introduction that you present to the person you are presenting to, as with anything. But one key factor in understanding Bitcoin, as Captain Sidd and I discussed on this week's episode of Meet The Taco Plebs, is helping others understand the problems that Bitcoin solves. In addition to this, we discussed what introduced Sidd to bitcoin, how it has changed his life and his predictions for the future. Make sure to give the audio podcast a listen, and read our interview below.

Whats your Bitcoin rabbit hole story?

When unanswered questions about modern economic theory clashed with my readings on emerging technologies especially through a book titled Throwing Rocks At The Google Bus the need for Bitcoin and decentralized systems clicked. I fell out of love with crypto through an experience fundraising for a bitcoin mining farm, where I learned the importance of a rock-solid consensus mechanism. Bitcoin has it, others don't.

How has Bitcoin changed your life?

Two ways: it serves as a simple vehicle for saving that allowed me to focus on producing value, instead of gambling to find arbitrage opportunities and "quick wins. By seeing how experts in finance use jargon to obfuscate the truth, I gained a distrust of experts and anyone who cannot break down their domain's jargon into simple, easily understood concepts.

Your pieces are incredibly straightforward and insightful, and they explain things in ways that both bitcoiners and nocoiners can understand. What's your process for creating these articles, and what do you think is the most important thing to understand for someone wanting to learn about bitcoin?

Thank you! I look for patterns and metaphors that help me boil down complex jargon into simple models. What I write about is usually something I've been mulling over for years, with a lot of stops, starts and meanderings. Writing an article just happens when something clicks in a way that I think others will understand.

What are you most looking forward to in the Bitcoin space?

Two things: more nation state adoption, and implementation of mining by energy producers. Nation state adoption by itself is not that interesting, but I believe it will drive conversation and questions at the governmental level forcing leaders to publicly answer questions about bitcoin and the monetary system. That will lay bare the insanity of what they're peddling to us.

Price prediction for the end of 2021, and the end of 2030?

2021: Under $100,000 because everyone seems to think we'll break it!

2030: No number in mind. Whereas the 2017 bull run was driven by the desire to get rich, the next nine years will be driven by the desire to avoid poverty as inflation takes hold. Bitcoin could be worth $1 billion by 2030 but what will a loaf of bread cost? Not to mention a decent steak

Continue reading here:
Bitcoin Is A Clear Solution To An Unclear Problem - Bitcoin Magazine

Here come the influencers. The Financial Conduct Authority (FCA) in the U.K. has announced an 11 million British pound (GBP) campaign enlisting celebrities and influencers to warn the general public of the dangers of high-risk investments. The FCA is a financial regulatory authority in the U.K. that was established in 2013. It operates independently of the U.K. government.

This is an interesting dynamic to consider given the context of public messaging relating to COVID-19 information. There are many examples of programs paying influencers on social media to propagate specific messaging relating to COVID, such as complying with mask mandates, getting vaccinated, etc. Now the point here isnt which side of any of these individuals is factually correct or effective, its just about the messaging mechanisms, incentives and trust people place in others. Say what you want about the societal health of influencer culture, the fact remains that it exists and large amounts of people actually place some degree of trust in influencers they follow on social media. This is why government programs of this sort relating to COVID have been effective.

The FCA is now tapping this playbook to begin a campaign messaging against high-risk investments to the wider public. During the COVID lockdowns in 2020 there was a massive uptick in retail investors trading on platforms like Robinhood, especially among Millennials. The huge unemployment spike in combination with unemployment benefits, stimulus payments and rent moratoriums left many people with excess cash and plenty of time on their hands. Many invested in cryptocurrencies and so-called meme stocks. Its probably fair to assume that a lot of these individuals lacked fundamental market understanding or were just chasing short-term gains.

The argument can be made that this was highly reckless behavior and that many of these new investors in the end will wind up financially hurting themselves. That is exactly what the FCA is claiming. In their announcement, the high-risk investments they are going to spread cautionary messaging about specifically includes mentions of cryptocurrencies and how many of these new retail investors first investments were cryptocurrencies. For instance, on Robinhood a massive portion of the money that was invested into cryptocurrencies was flowing into Dogecoin.

Now, its not entirely unreasonable to warn people against taking actions that could be financially harmful to themselves. However, there is more context to this FCA campaign than just that. They specifically mention in the announcement that 8.6 million people hold more than 10,000 GBP of investable assets in cash. Why? Because the FCA is trying to directly incentivize 1/5th of those people in the next five years to start investing. So at the same time they are going to start paying social media influencers to propagate warnings of high-risk investments in order to ostensibly protect investors, they are actively trying to encourage more and more of the population to start investing their money instead of holding it in cash.

Do you see the conflict of interests and goals here? All investment comes with risk and that will always be the case. This seems much more likely to be an attempt by the FCA to control what people are investing in rather than simply protecting them from dangerous investments. Bitcoin is a huge potential threat to legacy markets. The more people invest in bitcoin, the more liquidity it takes out of the legacy market. Every dollar I use to invest in bitcoin is a dollar that doesnt pump up the value of the S&P 500. Every dollar I use to invest in bitcoin is a dollar that doesnt drive up the price of real estate in some location. All of these markets depend on new, younger money continuing to use them as intergenerational wealth is transferred, in addition to older money selling to facilitate retirement. I have to imagine the proposition of bitcoin and other cryptocurrencies soaking up that liquidity instead of the stock market, real estate, etc. is a pretty terrifying proposition for legacy institutions.

Were in the phase of this is how they fight us. But its not going to get nasty and obvious right at the start. Its going to take the shape of things like this program financially incentivizing influencers who have built up trust in the wider populace to spread the message Bitcoin is bad, but the stock market is good. Theyll try to pressure and twist peoples arms into giving up their hard-earned cash and putting it into the market to not miss out on gains. I dont think they really care about people like that; they simply see that money as a necessary fuel to keep the ponzi scheme going and, just like America when it comes to oil reserves, they will do whatever they can to acquire it.

Dont lose sight of that. This is an information war coming and programs like this are one of the ways they are fought.

This is a guest post by Shinobi. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

Excerpt from:
The FCA Influencer Program And Bitcoin - Bitcoin Magazine